November 12, 2007

The Wizard of Oz

Posted in Gold Standard, Monetary Policy at 9:35 pm by davidprudente

wicked-witch-of-the-west.jpgDuring our discussion today, a student asked why the U.S. does not use gold to back the U.S. dollar. In the discussion and digression I mentioned that nations have, at various times, used many forms of currency including silver. This reminded me that the Wizard of Oz was on TV the other night and that some economists have suggested that it was an allegory for the bimetalism debate of the 1890s. I’ve linked some interesting information from Wikipedia that helps explain both issues. By the way, the U.S. stopped using gold to support the U.S. dollar in 1971. I think I said 1972 in class. Sorry.